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Mobile Bills to Go Cheaper From Next Month Up Surging The Telecom Market In India

12-Oct-2017 | Telecommunications and Computing

Telecom regulator of India has lowered the IUC (interconnect usage charge) to 6 Paise each minute, less than 50% of the current value of 14 Paise each minute, from next month and will slash the charge fully from January 1, 2020. This move will boost the Telecom market in India since users will get less bills on their calls.

"Termination charge for mobile to mobile has been lowered to 6 Paisa each minute from 14 Paisa each minute with effect from next month. From 1st January, 2020 onwards the termination tax for all kinds of local calls shall be nil," TRAI (Telecom Regulatory Authority of India) claimed to the media this week in a statement.

IUC is a charge that a mobile service operator gives to another operator to connect a call to the network of the latter. The decision is set to profit Reliance Jio, the new entrant, which has been hitting for reducing of the tax and ultimate scrapping, while the lowering might arrive as a huge bang to current players such as Vodafone India, Bharti Airtel, and Idea Cellular.

Current telecom companies have been hitting against reduction of the charge, which gives them net income, and shifting to BAK (bill and keep) rule, on the grounds that the present cost was insufficient for wrapping prices. The leading 3 carriers were forcing for an instantaneous elevation in the IUC to 30–35 Paise each minute.

"Reduced termination fees are hence expected to advantage users overall (both mobile and fixed) since operators will have better retail costing flexibility. Operators might be allowed to offer users a broader range of tariff structures and retail packages," TRAI claimed in its explanatory letter issued this week, as division of the regulation.

"While on one hand a reduced termination fee profits the users, it does not have a harmful effect on the telecom providers since it is open to the provider to recover whatever price it earns via the retail charges, subject to spirited market environment," it further added.

The regulation arrives more than a year post TRAI began consultation procedure on the controversial issue, which had resulted in an escalating and bitter war of words amid the new entrant and incumbents.